Skip to comments.DAVID WOO: The Economy In March Will Be 'Decisively Slower' And There's Already One Worrisome Sign
Posted on 03/10/2013 7:09:23 PM PDT by blam
DAVID WOO: The Economy In March Will Be 'Decisively Slower' And There's Already One Worrisome Sign
Bank of America
The economic data from last week was strong.
Goldman Sachs sees a "tantalizing prospect" that the US economy may already be over the hump and that growth will accelerate this year, proving wrong the naysayers who said that the end of the payroll tax holiday and the sequestration would be a blow to the recovery.
We thought this was interesting, because back in early February, BofA strategist for FX and rates David Woo said that the US economy was about to see the "moment of truth." At the time he reckoned that the data over the coming weeks would show whether the US recovery would survive or not.
So we asked Woo what he made of the latest good data that has the market and folks like Goldman Sachs so excited.
He remains skeptical.
Via email he writes:
The Feb data have been impressive but I still think March data will be decisively slower. The Rasmussen daily consumer confidence is down nearly 10 points from mid-Feb and the impact of the sequester will start to show up in the next 2-3 weeks (CBO is forecasting 750K job looses this year from sequester implementation).
(Excerpt) Read more at businessinsider.com ...
That 750 thousand of job losses has to be wrong. Its probably more like 750 Million. Or at least 170 Million. Or something.
I maintain that we have never really been in a recovery to begin with.
David Woo is not the only economist who is alarmed. Milton Friedman predicted exactly what would happen. Obama is spending, taxing and borrowing every dollar he can get,and crimping the economy with endless anti capitalist rules, edicts and regulations. Bernacke is printing wildly.He is also committing American taxpayers to EU bailouts and IMF schemes. Friedman predicted that initially parameters might look good and equity markets would increase in price.However since there has been no real increase in production or real wealth, the inevitable consequence will be inflation, a decline in stock real value and further economic decline. The American people will endure a lower standard of living for a long time. Both Obama and Bernacke hope they will be gone before the full consequences of their bizarre policies are undeniably real. Bernanke is the worst individual ever appointed to high office.
“CBO is forecasting 750K job looses this year from sequester implementation”
Sequester means the budget doesn’t go up as much as originally intended, but it is still going up 2%.
How could increasing the budget 2% result in 750k jobs lost???
Who are you going to believe - the esteemed experts at Goldman Sachs or your lying eyes???!!
“Goldman Sachs sees a “tantalizing prospect” that the US economy may already be over the hump and that growth will accelerate this year”
I mean who wouldn’t trust Goldman Sachs.
No jive! Sad part is no one in power has the smarts to see that and the kahuna's to remove him. Bernanke is literally robbing the futures of any one under age 40.
Fault of the sequester of course...
It’s spring break time in our part of the world. All of my neighbors have school age children and, without exception, all of them are staying home the entire time this year and saving their money - a first for all of them - instead of flying off for a week of fun. While the loss of spending from these 16 families will certainly not matter a bit to Wall Street or Washington, I do feel it is more indicative of what people feel is going to happen to the economy than anything published by the so called experts.
Meet your new Treasury Secretary!
Great video with Peter Schiff. We are so screwed! Only 5 minutes, watch it.
If you think Bernanke is bad, check out Lew, at the video just above.
When I see Goldman Sachs and “over the hump” in the same sentence I can only imagine what’s coming next.
Yep. That “two negative-GDP quarters in a row” stuff is an arbitrary definition at best. I’ll say it again (maybe for the third time this week, sorry if you’ve seen this before), the only unemployment statistic that matters is the Labor Force Participation Rate, which has gone nowhere but down, and continues to bump along at 30-year lows. That’s recession, continuing from the previous recession, and a continuing recession.
Lew? You mean the guy who claimed he didn’t actually do anything while he worked at Citibank?
It’s MSM incompetence, group-think, spin, and laziness, as usual.
Here’s a sentence directly from the CBO website:
“In the absence of sequestration, CBO estimates, GDP growth would be about 0.6 percentage points faster during this calendar year, and the equivalent of about 750,000 more full-time jobs would be created or retained by the fourth quarter.”
Please note that this is very nearly the exact opposite of what is universally being claimed. CBO is NOT claiming that existing jobs will be lost.
Secondly, the point is moot. We have seen from the Obamacare disaster that CBO’s estimates must be based on whatever fraudulent numbers are provided to them — garbage in (the rule not the exception), garbage out. Check out their projections for the yearly debt and cumulative national deficit over the years — the numbers are hopelessly wrong.
We had a better year and were also underwithheld, so we owe taxes and our quarterlies are increased significantly. Health insurance is up dramatically. Gas and food, of course. We have to cut all discretionary spending, cut every cost as far as possible and are grateful for our preps because we are using them right now.
I expect a tax refund next year, since everyone is experiencing the same as we are, so business will decrease.
Glad we aren’t in the hospitality industry. I think they are going to have a down year.
It's hard to believe that the people who vote for her are even more stupid.
What an embarrassment...this idiot represents MY country. How did this happen?
We are already screwed without Lew...he's just another straw on the camels back.
are grateful for our preps because we are using them right now.”
I, too, have had to use some of them on occasion. One of my artist friends made an engraved plate to put on the front of my pantry and it is now referred to as the “Obama Closet”.
Just for grins I had written the price of some of the things I bought that have been part of my Obama Closet the longest and compared them to the current prices. Found that not only has the cost increased by 15-20%, but the replacements are all slightly smaller in size or the same size package with less inside.
How could increasing the budget 2% result in 750k jobs lost???
It depends on where the budget will be spent. If the extra 2% goes into entitlement spending then there wont be many job cuts. But the military is 20% of GDP. The military is absorbing half of the budget hit. The Pentagon announced it will furlough or lay off 800k people, mostly contractors.
Having been a military program manager I can tell you that even a small funding perturbation can lead to cascading impacts that range far and wide. Suppose your program has a burn rate (the rate it uses funds per month) of $2 million. The customer (Navy, AF, NSA, etc.) tells you to lower the burn rate to $1.5 million per month. You must stretch out the schedule. You no longer have enough funds to keep vital people full time. They either get laid off, move to other jobs or leave the company. Subcontractors may go out of business because they ramped up for your business or they made commitments and now wont be able to pay them. Then there are penalties because of contract clauses that further impact your budget well beyond a simple slow-down in funding. These take even more funds from the project.
In the end, these slow-downs always end up costing much more than they save.
Yeah, the hired empty suit who signs his name with a series of looping zeroes. Our Sec Treasury.